The Ministry of Finance Malaysia (MOF) has rolled out targeted Sales and Service Tax (SST) relief measures to ease business costs, support micro, small and medium enterprises (MSMEs), and help contain prices of essential goods.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has emphasised the service tax on rental and leasing services will be reduced to 6% from 8% effective Jan 1, 2026.
The annual sales threshold for MSMEs exempt from service tax will also be raised to RM1.5 million from RM1 million, while newly established MSMEs will enjoy a one-year exemption on rental and leasing service.
To curb cost pressures, sales tax on critical raw materials and inputs used by registered manufacturers will be exempted from Jan 1, 2026, covering animal feed, fertilisers and pesticides.
Meanwhile, the service tax exemption for construction contracts signed before July 1, 2025, without a reviewable clause, has been extended to June 30, 2027, giving eligible contracts a total two-year exemption.
Construction services for places of worship remain exempt from service tax, effective July 1, 2025.
The ministry said the measures are aimed at strengthening business resilience while safeguarding price stability.
